Gary North’s Reality Check (Nov. 2, 2012)
Carlo “Charles” Ponzi was a con man who was the Bernie Madoff of his era. For two years, 1918 to 1920, he sold an impossible dream: a scheme to earn investors 50% profit in 45 days. He paid off old investors with money generated from new investors. The scheme has been imitated every since.
Every Ponzi scheme involves five elements:
1. A promise of statistically impossible high returns
2. An investment story that makes no sense economically
3. Greedy investors who want something for nothing
4. A willing suspension of disbelief by investors
5. Investors’ angry rejection of exposures by investigators
Strangely, most Ponzi schemes involve a sixth element: the unwillingness of the con man to quit and flee when he still can. Bernie Madoff is the supreme example. But Ponzi himself established the tradition.
The scheme, once begun, moves toward its statistically inevitable end. From the day it is conceived, it is doomed. Yet even the con man who conceived it believes that he can make it work one more year, or month, or day. The scheme’s designer is trapped by his own rhetoric. He becomes addicted to his own lies. He does not take the money and run.
This leads me to a set of conclusions. Because all Ponzi schemes involve statistically impossible goals, widespread greed, suspension of disbelief, and resistance to public exposure,
All fractional reserve banking is a Ponzi scheme.
All central banking is a Ponzi scheme.
All government retirement programs are Ponzi schemes.
All government-funded medicine is a Ponzi scheme.
All empires are Ponzi schemes.
All Keynesian economics is a Ponzi scheme.
But there is a difference between a private Ponzi scheme and a government Ponzi scheme. The private scheme relies on deception and greed alone. A government Ponzi scheme relies on deception, greed, badges, and guns.
SOCIAL SECURITY
Political liberals in the mainstream media get very upset when somebody speaks of the sacred cow of Social Security as a Ponzi scheme. They go gunning for any political figure who uses the phrase “Ponzi scheme” in relation to Social Security. This is because they know that such a politician is a conservative, and they want to see him defeated at the next election.
It doesn’t matter whether politicians say the naughty words or not; the Social Security system is a Ponzi scheme, and it will go bust.
Medicare is a vastly larger Ponzi scheme, and it, too, will go bust. In fact, it will go bust with such an impact on the federal budget that it will pull down the Social Security system with it. In fact, if the promises are not broken to the oldsters who are dependent upon Medicare and Social Security, the deficits in the Medicare system will bring down the entire federal government. The government will default on all of its debts. Anybody who bought that debt will then wind up as helpless as the people who have become dependent upon Social Security and Medicare.
The people who are dependent upon Social Security don’t want to hear this. They want to tell us that they paid into the system, fair and square, and therefore we owe them the money. Well, I am in the system, and I paid into the system, and I’m going to cash my checks from the system, but I will be glad when the system goes belly up.
ETHICAL CAUSE AND EFFECT
Why should the thought of the bankruptcy of these Ponzi schemes cheer me up? Because I believe in ethics. I am horrified by the thought of a completely unethical system being successful over time. The longer the day of reckoning is delayed, the more people will be lured into it. I wish the system would go belly up sooner than later, because fewer people will become dependent on it if the system goes belly up sooner rather than later.
Sadly, the people who believe that it is ethical to stick a gun in the belly of one man and take his money, in order to support someone else, are in favor of the Social Security system. They want it to keep going forever. They want the moral corruption of coercion to continue.
The initial motivation for sticking the gun in a man’s belly was political rather than charitable. Chancellor Otto von Bismarck in the 1880s rammed the first old age retirement program down the throats of German politicians because he knew that this would undercut the liberals, which it did. The reasons were not based on charity. The reasons were political. They were justified by arguments favoring state-funded charity, but it was all a con job, as all Ponzi schemes are.
But Social Security is vastly more corrupt than a Ponzi scheme, because a Ponzi scheme involves no coercion and a lie, whereas Social Security involves massive coercion and a much bigger lie. I will shed no tears when the system goes down.
(On why it will go down, click the link.)
Our BIGGEST WORRY WAS WHEN OUR "WOMEN ALONE" PUT GEORGE SOROS, THE PROMISED HEAD OF OUR DESTRUCTION VIA THE 60's 'CHICAGO"-BASED MARXIST TERRORIST GROUP KNOWN AS THE "WEATHERMEN" as our RULER via Barak Obama with the PLAN TO USE THE UN TO RULE OVER U.S. VIA ONLY 'BLACK" NATIONS IN THE U.N. How many out there KNOW that Bernardine Dohrn of this SAME terrorist group EVEN sponsored Charles Manson out in California? It seems to me that our MARXIST SCHOOL SYSTEM created by Thomas Dewey in the 1940's(( I beleive it was(?))has been very successful. In fact, I recall Krushev(sp?) of the USSR in the UN predicing that our grandchilden in the 60's as being marxists too! Duh! Damn those torpedos!
Interesting the number of "experts" who ostracized and criticized Rick Perry for even suggesting the "P" word in the Republican debates.
I guess about the same number who castigated Joe Wilson for his "You Lie!" comment.
He also stated that America would fall into their hand like an over ripened grapefruit.
What most dont realize is that he was claiming our economic collapse, not a physical / military type take over.
What i wonder about is the citizens, who when presented with these truths about our governments own ponzi schemes, stick their heads in the sand or cover their ears and shout LA LA LA LA . Can real truth be that upsetting to them?
Yes Virginia, those programs are nothing more than elaborate ponzi schemes! Even though you will steadfastly hold out hope that they will magically be rescued, they can not be. By their own structure, which you fail to reconize, they are designed to create collape through a false, fiat money/ debt / currency. But as long as you have your misguided faith in the lie you have been told, the money is considered to have value. Regardless of denomination, the paper and processing/priniting of our evidence of debt "notes" cost more than the face value-.01 per note.
Every problem has a root cause, and then only the symptoms are the clue to the bigger problem. In this particular case, a debt financial system created by the Federal Reserve (Root Cause) created the over burdening debt / unbrideled spending (symptom); and it was created by lying to the american people and promising them more return for their "investment's".
But they only invested into a lie.
I guess that they are too ashamed to admit that they fell for it. Why else would they not want to fix it?
I guess the kicker is that you shouldn't bring it up during a campaign. Once you're in, in whatever capacity you serve, then you bring it up and keep bringing it up until someone (eg. Congress, Governors, The People) listens.
I also guess that is why, when they are confronted with the truth of being duped by their own government, they turn their head and refuse to listen. I guess they have no outrage left in them. They merely stick their head in the sand, and / or cover their ears and scream LA LA LA LA LA ; like they do when the government continues to put over burdening controls on their lives daily through statue laws and regulations. But the jokes on them!
The coming death of this false economy will cause them more pain than they ever experenced, and they will wail WHY????
The short answer is: You didnt, or wouldnt listen; you, by your inaction caused it.
Remember, I am just the messenger.
Part of the problem, too, is that we don't seem to be able to opt out of Social Security. It's more a tax than anything now since it comes out of my paycheck without my permission. But if we could quit paying, the elders who are using it now would suffer since the Congress stole the money long ago and the funding is running about two generations behind now.
Do you mean the coming "CASHLESS SOCIETY," which ONLY LASTS 3 1/2 YEARS? Interesting info. though, thankyou! I still say that your "wonder," however, is controlled by our 74%er's(i.e., our WOMEN & Blacks), who both are GATHERER'S & just LOVE being GIVEN THINGS without HAVING TO WORK FOR IT! Again, just saying, what is,is…
Solution: Get out of debt. Buy and sell in cash when possible. Keep your cash out of the banks and volatile markets. Invest in your own business, gold, silver, and arable land. Have water (and purification equipment), food, medicine, and other supplies in storage. And ride out the storm. Worst case would be you end up with a thriving business, land you can lease for profit to farmers, liquid wealth, and some food you can donate to charity just before it expires.
Or you can pay into a system that has a history of corruption, instability, and inflation…all with the promise of Social Security benefits that provide just enough to keep you living in poverty until you’re 90 years old.
Your choice.
Thomas Dewey ran against Harry Truman for president in '48. JOHN Dewey was the advocate of "progressive" education which laid the groundwork (long before the 1940's) of schools as indoctrination centers rather than centers of enlightenment.